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Ideagen investors unimpressed by in-line interim figures

Shares in software group Ideagen lost more than six per cent of their value on Tuesday despite the company posting in line interim results and Finncap upping its target price on the stock by 4p.

The AIM-listed company doubled its pre-tax profit for the six months ended October 31st from £0.23m to £0.52m. Revenue for the period climbed from £2.58m to £3.70m, although the cost of sales rose £0.18m to £0.59m.

Basic earnings per share rose from 0.22p to 0.31p year-on-year. The group also declared a maiden dividend of 0.05p per share.

Chief Executive David Hornsby said that the group had delivered strong organic growth and that, looking ahead, it was confident in its outlook for the remainder of the year.

"The period saw further transformation of the group through continued organic revenue and profit growth and a further acquisition [...] The group continues to benefit from robust recurring revenues and has also invested in additional resources to manage the customer base resulting in a maintenance and support renewal rate of 96%.

"Recurring revenues now represent 54% of our software and services revenue and cover 86% of the fixed cost base," he added.

Broker Finncap raised its target price on the stock from 32p to 36p following the results.

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